Growth in valuations boosted by buy-to-let
The total number of residential valuations conducted by Connells in November was 3% higher than a year ago despite a monthly fall in activity of 1%.
John Bagshaw, corporate services director of Connells Survey & Valuation, said although November was far from a “stellar” month by historic standards valuations activity saw annual growth for a second successive month.
He said: “The seasonal monthly drift down we’d expect at this point in the year has been less pronounced than in previous years although success has been confined to certain parts of the valuations market, with buy-to-let a star performer.”
The report showed new buy-to-let valuations were central to the strength of November’s figures, with a 14% rise in activity in the sector compared to October, leaving buy-to-let activity 18% higher than a year ago. Buy-to-let valuations made up 16% of the market, the highest level since 2007.
Bagshaw added: “Funding for Lending has changed lenders’ behaviour and prospective landlords have benefited as a result. Cheaper credit from the Bank of England has so far mainly gone to lower LTV products, such as buy-to-let mortgages, due to the requirements on banks to simultaneously hold more capital.”
While first-time buyer activity may have weakened in the month, down 8% from October, it was still 4% above the level seen a year ago.
However in November first-time buyers were responsible for the lowest proportion of valuations since March when this figure was last as low as 30% of all residential valuations.
“The Autumn Statement was a missed opportunity to boost the lower end of the market,” said Bagshaw. “First-time buyers would have welcomed a renewed stamp duty holiday for properties under £250,000 a move which would have provided new impetus to the market and taken the pressure off the success of the Funding for Lending Scheme.
“As things stand, unless lenders are able divert disproportionately more cheap funds to first-timers, the housing market’s recovery is likely be as slow as that of the wider economy.”